Yes. A demolition business may be able to use demolition equipment finance to purchase additional machinery when larger or more complex jobs require more equipment.
For demolition contractors, winning a bigger project can create a new problem: having enough machinery available to actually complete the work efficiently.
One project might only require an excavator and truck. Another could call for multiple excavators, skid steers, loaders, specialised attachments, tippers or additional vehicles working across the site at the same time.
Buying all of that equipment outright can require a significant amount of capital.
Equipment finance can allow an eligible demolition business to spread the cost of acquiring machinery over an agreed loan term rather than paying the entire purchase price upfront.
Why Can Bigger Demolition Jobs Require More Equipment?
Demolition work can vary considerably between sites.
A smaller residential demolition may have very different equipment requirements from a commercial building, industrial structure or larger redevelopment project.
As the scale of the project increases, a contractor may need machinery for several different stages of the job, including:
- Breaking down structures
- Moving concrete and building material
- Loading debris
- Sorting materials
- Transporting waste from the site
- Processing or crushing material
- Preparing the site for the next stage of construction
That can leave growing demolition businesses deciding whether to continually hire equipment or begin adding more machinery to their own fleet.
What Equipment Could a Demolition Business Finance?
The equipment required will depend on the type of demolition work being completed, but finance may be available for a wide range of business assets.
Common examples can include:
- Excavators – including machines fitted with demolition-specific attachments
- Skid steer loaders – for material handling and work in tighter areas
- Wheel loaders – for moving larger quantities of material
- Crushers and pulverisers – for breaking down concrete and other materials
- Hydraulic breakers – for concrete and structural demolition work
- Grapples and shears – for handling and processing demolition material
- Tippers and trucks – for transporting equipment, rubble and waste
- Trailers – for moving machinery between worksites
- Cranes and lifting equipment – where specialised lifting is required
WorkSafe Victoria’s demolition guidance specifically discusses the use of equipment such as excavators, hydraulic rock breakers, pulverising attachments and load-shifting plant during demolition work. You can read more about the safety requirements surrounding demolition plant in WorkSafe Victoria’s demolition guidance.
How Does Demolition Equipment Finance Work?
Rather than using a large amount of business cash to purchase machinery outright, an eligible business can borrow funds to purchase an asset and repay the finance over an agreed period.
The equipment being purchased will often form part of the security for the finance.
Depending on the business, lender and equipment being purchased, structures may include an equipment loan, chattel mortgage, finance lease or another form of commercial asset finance.
If you want a broader explanation of the process, LoanBrix has also covered how commercial equipment funding works for Australian businesses.
The appropriate structure will depend on the transaction and the financial position of the business.
Why Finance Equipment Instead of Paying Cash?
The main reason is not necessarily that a business cannot afford the equipment.
It can be about deciding where its available cash is most useful.
A demolition company taking on a larger contract may still need cash available for:
- Wages and subcontractors
- Fuel
- Insurance
- Equipment maintenance
- Waste disposal
- Transport
- Site preparation
- Deposits and project expenses
Putting a large amount of cash into one excavator, loader or truck may reduce the funds available for these other expenses.
Financing the asset can instead spread that purchase across regular repayments while allowing the equipment to be put to work in the business.
Can You Finance More Than Just an Excavator?
Yes. Equipment funding does not have to be limited to one type of machine.
A demolition contractor might already own its main excavator but need a second machine to take on another project.
Another business might have sufficient earthmoving equipment but need another tipper, trailer or truck to improve how material is moved between sites.
If transport is becoming the bottleneck, you can also read our guide on how businesses may be able to finance a truck or work vehicle.
For projects requiring larger lifting equipment, we have also explained funding specialised cranes and lifting equipment.
The important part is identifying which piece of equipment is actually limiting the business’s ability to complete work or take on additional contracts.
Can Used Demolition Equipment Be Financed?
Potentially, yes.
Commercial equipment finance is not necessarily restricted to brand-new machinery.
Used excavators, trucks, loaders and other machinery may also be considered, although the available lenders and finance terms can depend on factors such as:
- The age of the equipment
- Purchase price
- Equipment condition
- Who is selling the asset
- The expected useful life of the machine
- The business’s financial position
This can be useful for demolition contractors that do not need a brand-new machine but want to increase capacity without committing as much capital to the purchase.
What Will a Lender Look at?
Approval for demolition equipment finance is not based on the machinery alone.
Depending on the lender and application, they may consider factors including:
- How long the business has been operating
- Business turnover and cash flow
- The type of demolition work being completed
- The equipment being purchased
- The age and value of the asset
- Existing business debts
- Credit history
- Whether a deposit is being contributed
- How the equipment will be used within the business
An established demolition company purchasing another excavator for existing contracts may therefore present a different application from a new business purchasing its first major piece of machinery.
Should You Finance Equipment Before Winning the Job?
This depends on the circumstances.
Some businesses begin investigating finance after winning a major contract. Others want to understand their borrowing capacity beforehand so they know what equipment they could realistically acquire if another project becomes available.
Speaking with a broker earlier can help a business understand possible lenders, documentation requirements and finance structures before committing to a machinery purchase.
That can be particularly useful when equipment needs to be sourced quickly to meet a project start date.
How Can LoanBrix Help With Demolition Equipment Finance?
LoanBrix helps Australian businesses compare commercial and asset finance options for machinery and vehicles.
Instead of approaching a single lender, we can assess the type of equipment you want to purchase, your business circumstances and the proposed transaction before looking at suitable options from our lender panel.
Our asset finance experience includes equipment such as excavators, trucks, commercial vehicles and other specialised business machinery.
If a larger demolition contract means your existing fleet is no longer enough, the next step does not necessarily have to be turning the job down or using all of your available cash to purchase another machine.
Talk to LoanBrix about financing the equipment your business needs for its next job.
